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Mumbai: The gross loan portfolio of India’s microfinance industry grew 10% in 2021-22 to 2.85 trillion, according to data released by industry association Microfinance Institutions Network (MFIN) on Wednesday.

The data showed that 12 banks held the largest share of portfolio in micro-credit with total loan outstanding of 1.14 trillion, about 40% of total micro-credit universe. NBFC-MFIs were second largest provider of micro-credit with a loan amount outstanding of 1 trillion, accounting for 35.2% of the total industry portfolio.

In terms of regional distribution of gross loans, the eastern, the northeastern and the southern states account for 64.3% of the total portfolio. Tamil Nadu has become the largest state in terms of portfolio outstanding followed by Bihar and West Bengal, MFIN said.

Alok Misra, chief executive and director, MFIN said that the microfinance industry has shown good progress during Q4 FY22, building on the momentum created in Q3.

“The portfolio quality has improved significantly as compared to end of Q1 FY22, when the second wave of covid-19 had caused widespread stress across all parts of the country," said Misra.

MFIN said that some deviation from the past trends were observed during FY22. First, the proportion of NBFC-MFI loans in the whole portfolio increased by 4.1% to 35.2%, although banks continue to be the main contributors. Second, geographical distribution of portfolio has also witnessed a change with decrease in the share of east and northeast by 3.3% while the share of south and north regions have increased by 1.3% each.

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